Progress (PRGS ) today announced results for its fiscal fourth
quarter and fiscal year ended November 30, 2017.

Revenue was $116.1 million during the quarter compared to $117.7 million
in the same quarter last year, a year-over-year decrease of 1% on an
actual currency basis and 3% on a constant currency basis. On a non-GAAP
basis, revenue was $116.3 million during the quarter compared to $118.0
million in the same quarter last year, a decrease of 1% on an actual
currency basis and 3% on a constant currency basis.

On a GAAP basis, diluted earnings per share was $0.34 compared to a
diluted loss per share of $1.52 in the same quarter last year. On a
non-GAAP basis, diluted earnings per share was $0.67 compared to $0.62
in the same quarter last year.

Yogesh Gupta, CEO at Progress, said: "Our strong Q4 performance allowed
us to achieve better-than-expected revenue, earnings per share,
operating margins and cash flow for 2017. We have strengthened our core
operations, and now offer the best platform for building
next-generation, mission-critical, cognitive-first business applications
as well. We look forward to continued momentum in 2018, as we execute on
a strategic plan that will drive sustainable, long-term value for all
shareholders."

Additional financial highlights included:

On a GAAP basis in the fiscal fourth quarter of 2017:

--
Revenue was $116.1 million compared to $117.7 million in the same
quarter in fiscal year 2016;

--
Income from operations was $28.8 million compared to a loss from
operations of $62.4 million in the same quarter last year;

--
Net income was $16.4 million compared to a net loss of $73.8 million
in the same quarter last year;

--
Diluted earnings per share was $0.34 compared to a diluted loss per
share of $1.52 in the same quarter last year; and

--
Cash from operations was $32.5 million compared to $33.9 million in
the same quarter last year.

On a non-GAAP basis in the fiscal fourth quarter of 2017:

--
Revenue was $116.3 million compared to $118.0 million in the same
quarter last year;

--
Income from operations was $49.1 million compared to $42.6 million in
the same quarter last year;

--
Operating margin was 42% compared to 36% in the same quarter last year;

--
Net income was $32.1 million compared to $30.5 million in the same
quarter last year;

--
Diluted earnings per share was $0.67 compared to $0.62 in the same
quarter last year; and

--
Adjusted free cash flow was $32.4 million compared to $32.4 million in
the same quarter last year.

Paul Jalbert, CFO, said: "We are pleased with our financial performance
for Q4 and for the full year. We delivered on our commitment to operate
our business efficiently, exceeding our cost-savings targets by reducing
our total expenses by over $30 million. We are confident in our ability
to generate continued strong operating margins and cash flows, and are
well-positioned to achieve our financial goals in 2018."

--
Cash, cash equivalents and short-term investments were $183.6 million
at the end of the quarter;

--
DSO was 47 days, compared to 48 days in the fiscal third quarter of
2017 and 50 days in the fiscal fourth quarter of 2016;

--
Pursuant to the $250 million share authorization of the Board of
Directors, Progress repurchased 0.8 million shares for $30.0 million
during the fiscal fourth quarter of 2017. For the full fiscal year,
Progress repurchased 2.2 million shares for $73.9 million; and

--
On January 5, 2018, our Board of Directors declared a quarterly
dividend of $0.14 per share of common stock that will be paid on March
15, 2018 to shareholders of record as of the close of business on
March 1, 2018.

Full Year Results

On a GAAP basis in the fiscal year 2017:

--
Revenue was $397.6 million compared to $405.3 million in fiscal year
2016, a year-over-year decrease of 2% on both an actual and constant
currency basis;

--
Income from operations was $70.6 million compared to a loss from
operations of $29.7 million in the prior fiscal year;

--
Net income was $37.4 million compared to a net loss of $55.7 million
in the prior fiscal year;

--
Diluted earnings per share was $0.77 compared to a diluted loss per
share of $1.13 in the prior fiscal year; and

--
Cash from operations was $105.7 million compared to $102.8 million in
the prior fiscal year.

On a non-GAAP basis in the fiscal year 2017:

--
Revenue was $398.6 million compared to $407.4 million in fiscal year
2016, a year-over-year decrease of 2% on both an actual and constant
currency basis;

--
Income from operations was $144.5 million compared to $123.1 million
in the prior fiscal year;

--
Operating margin was 36% compared to 30% in the prior fiscal year;

--
Net income was $92.5 million compared to $82.3 million in the prior
fiscal year;

--
Diluted earnings per share was $1.91 compared to $1.65 in the prior
fiscal year; and

--
Adjusted free cash flow was $121.5 million compared to $100.6 million
in the prior fiscal year.

2018 Business Outlook

Progress provides the following guidance for the fiscal year ending
November 30, 2018 and the first fiscal quarter ending February 28, 2018:

Progress fiscal 2018 financial guidance is based on current exchange
rates. The positive currency translation impact on Progress fiscal year
2018 business outlook compared to 2017 exchange rates is approximately
$4.0 million on GAAP and non-GAAP revenue. The currency translation
impact on the fiscal 2018 GAAP and non-GAAP diluted earnings per share
guidance is approximately $0.01. The positive currency translation
impact on Progress fiscal Q1 2018 business outlook compared to 2017
exchange rates is approximately $2.0 million on GAAP and non-GAAP
revenue. The currency translation impact on Progress fiscal Q1 2018
GAAP and non-GAAP diluted earnings per share guidance is approximately
$0.01. To the extent that there are further changes in exchange rates
versus the current environment, this may have an additional impact on
Progress business outlook.

Conference Call

The Progress quarterly investor conference call to review its fiscal
fourth quarter of 2017 will be broadcast live at 5:00 p.m. ET on
Wednesday, January 10, 2018 and can be accessed on the investor
relations section of the companys website, located at www.progress.com.
Additionally, you can listen to the call by telephone by dialing
1-800-967-7134, pass code 7064924. The conference call will include
comments followed by questions and answers. An archived version of the
conference call and supporting materials will be available on the
Progress website within the investor relations section after the live
conference call.

We use this non-GAAP information to evaluate our period-over-period
operating performance because our management believes the information
helps illustrate underlying trends in our business and provides us with
a more comparable measure of our continuing business, as well as a
greater understanding of the results from the primary operations of our
business, by excluding the effects of certain items that do not reflect
the ordinary earnings of our operations. Management also uses this
non-GAAP financial information to establish budgets and operational
goals, which are communicated internally and externally, evaluate
performance, and allocate resources. In addition, compensation of our
executives and non-executive employees is based in part on the
performance of our business evaluated using this same non-GAAP
information.

However, this non-GAAP information is not in accordance with, or an
alternative to, generally accepted accounting principles in the United
States (GAAP) and should be considered in conjunction with our GAAP
results as the items excluded from the non-GAAP information often have a
material impact on Progress financial results. A reconciliation of
non-GAAP adjustments to Progress GAAP financial results is included in
the tables below and is available on the Progress website at www.progress.com
within the investor relations section.

As described in more detail below, non-GAAP revenue, non-GAAP costs of
sales and operating expenses, non-GAAP income from operations and
operating margin, non-GAAP net income, and non-GAAP diluted earnings per
share exclude the effect of purchase accounting on the fair value of
acquired deferred revenue, amortization of acquired intangible assets,
impairment of acquired intangible assets, stock-based compensation
expense, fees related to shareholder activist, restructuring charges,
acquisition-related expenses, certain identified non-operating gains and
losses, and the related tax effects of the preceding items. We also
provide guidance on adjusted free cash flow, which is equal to cash
flows from operating activities less purchases of property and equipment
and capitalized software development costs, plus restructuring payments.

In the noted fiscal periods, we adjusted for the following items from
our GAAP financial results to arrive at our non-GAAP financial measures:

--
Acquisition-related revenue - In all periods presented, we
include acquisition-related revenue, which constitutes revenue
reflected as pre-acquisition deferred revenue that would otherwise
have been recognized but for the purchase accounting treatment of
acquisitions. The acquisition-related revenue relates to Telerik,
which we acquired on December 2, 2014, and Kinvey, which we acquired
on June 1, 2017. Since GAAP accounting requires the elimination of
this revenue, GAAP results alone do not fully capture all of our
economic activities. We believe these adjustments are useful to
management and investors as a measure of the ongoing performance of
the business because, although we cannot be certain that customers
will renew their contracts, we have historically experienced high
renewal rates on maintenance and support agreements and other customer
contracts. Additionally, although acquisition-related revenue
adjustments are non-recurring with respect to past acquisitions, we
expect to incur these adjustments in connection with any future
acquisitions.

--
Amortization of acquired intangibles - In all periods
presented, we exclude amortization of acquired intangibles because
those expenses are unrelated to our core operating performance and the
intangible assets acquired vary significantly based on the timing and
magnitude of our acquisition transactions and the maturities of the
businesses acquired.

--
Impairment of goodwill and acquired intangibles - In fiscal
year 2016, we exclude impairment charges applicable to goodwill and
acquired intangible assets because such expenses distort trends and
are not part of our core operating results. Such impairment charges
are inconsistent in amount and frequency and we believe that
eliminating these amounts, when significant and not reflective of
ongoing business and operating results, facilitates a more meaningful
evaluation of our current operating performance and comparisons to our
operating performance in other periods.

--
Stock-based compensation - In all periods presented, we exclude
stock-based compensation to be consistent with the way management and
the financial community evaluates our performance and the methods used
by analysts to calculate consensus estimates. The expense related to
stock-based awards is generally not controllable in the short-term and
can vary significantly based on the timing, size and nature of awards
granted. As such, we do not include these charges in operating plans.
Stock-based compensation will continue in future periods.

--
Fees related to shareholder activist - In September 2017,
Praesidium Investment Management, one of our largest shareholders,
publicly announced in a Schedule 13D filed with the Securities and
Exchange Commission its disagreement with our strategy and stated that
it was seeking changes in the composition of our Board of Directors.
In fiscal year 2017, we have incurred, and in fiscal year 2018 we
expect to incur, professional and other fees relating to Praesidiums
actions. We exclude these fees because they distort trends and are not
part of our core operating results.

--
Restructuring expenses - In all periods presented, we exclude
restructuring expenses incurred because those expenses distort trends
and are not part of our core operating results.

--
Acquisition-related and transition expenses - In all periods
presented, we exclude acquisition-related expenses because those
expenses distort trends and are not part of our core operating
results. In recent years, we have completed a number of acquisitions,
which result in our incurring operating expenses which would not
otherwise have been incurred. By excluding certain transition,
integration and other acquisition-related expense items in connection
with acquisitions, this provides more meaningful comparisons of the
financial results to our historical operations and forward-looking
guidance and the financial results of less acquisitive peer companies.
We consider these types of costs and adjustments, to a great extent,
to be unpredictable and dependent on a significant number of factors
that are outside of our control. Furthermore, we do not consider these
acquisition-related costs and adjustments to be related to the organic
continuing operations of the acquired businesses and are generally not
relevant to assessing or estimating the long-term performance of the
acquired assets. In addition, the size, complexity and/or volume of
past acquisitions, which often drives the magnitude of
acquisition-related costs, may not be indicative of the size,
complexity and/or volume of future acquisitions.

--
Income tax adjustment - In all periods presented, we
adjust our income tax provision by excluding the tax impact of the
non-GAAP adjustments discussed above. In addition, in fiscal year
2016, we adjusted our income tax provision to remove from non-GAAP
income the positive impact of an out-of-period adjustment recorded to
the income tax provision during the fiscal second quarter of 2016.

Constant Currency

Revenue from our international operations has historically represented a
substantial portion of our total revenue. As a result, our revenue
results have been impacted, and we expect will continue to be impacted,
by fluctuations in foreign currency exchange rates. For example, if the
local currencies of our foreign subsidiaries strengthen, our
consolidated results stated in U.S. dollars are positively impacted.

As exchange rates are an important factor in understanding period to
period comparisons, we present revenue growth rates on a constant
currency basis, which helps improve the understanding of our revenue
results and our performance in comparison to prior periods. The constant
currency information presented is calculated by translating current
period results using prior period weighted average foreign currency
exchange rates. These results should be considered in addition to, not
as a substitute for, results reported in accordance with GAAP.

Note Regarding Forward-Looking Statements

This press release contains statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Progress has identified some of these forward-looking
statements with words like "believe," "may," "could," "would," "might,"
"should," "expect," "intend," "plan," "target," "anticipate" and
"continue," the negative of these words, other terms of similar meaning
or the use of future dates.

Forward-looking statements in this press release include, but are not
limited to, statements regarding Progress business outlook and
financial guidance. There are a number of factors that could cause
actual results or future events to differ materially from those
anticipated by the forward-looking statements, including, without
limitation:

(1) Economic, geopolitical and market conditions, including the
uncertain economic environment in Europe as a result of the Brexit vote,
and the continued difficult economic environment in Brazil and other
parts of the world, can adversely affect our business, results of
operations and financial condition, including our revenue growth and
profitability, which in turn could adversely affect our stock price.
(2) We may fail to achieve our financial forecasts due to such factors
as delays or size reductions in transactions, fewer large transactions
in a particular quarter, fluctuations in currency exchange rates, or a
decline in our renewal rates for contracts. (3) Our ability to
successfully manage transitions to new business models and markets,
including an increased emphasis on a cloud and subscription strategy,
may not be successful. (4) If we are unable to develop new or
sufficiently differentiated products and services, or to enhance and
improve our existing products and services in a timely manner to meet
market demand, partners and customers may not purchase new software
licenses or subscriptions or purchase or renew support contracts. (5) We
depend upon our extensive partner channel and we may not be successful
in retaining or expanding our relationships with channel partners.
(6) Our international sales and operations subject us to additional
risks that can adversely affect our operating results, including risks
relating to foreign currency gains and losses. (7) If the security
measures for our software, services or other offerings are compromised
or subject to a successful cyber-attack, or if such offerings contain
significant coding or configuration errors, we may experience
reputational harm, legal claims and financial exposure. (8) We have made
acquisitions, and may make acquisitions in the future, and those
acquisitions may not be successful, may involve unanticipated costs or
other integration issues or may disrupt our existing operations. (9) Our
business could be negatively affected by the actions of stockholder
activists. For further information regarding risks and uncertainties
associated with Progress business, please refer to Progress filings
with the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the fiscal year ended November 30, 2016 and its
Quarterly Reports on Form 10-Q for the fiscal quarters ended February
28, 2017, May 31, 2017 and August 31, 2017. Progress undertakes no
obligation to update any forward-looking statements, which speak only as
of the date of this press release.

About Progress

Progress (PRGS ) offers the leading platform for developing and deploying
mission-critical business applications. Progress empowers enterprises
and ISVs to build and deliver cognitive-first applications that harness
big data to derive business insights and competitive advantage. Progress
offers leading technologies for easily building powerful user interfaces
across any type of device, a reliable, scalable and secure backend
platform to deploy modern applications, leading data connectivity to all
sources, and award-winning predictive analytics that brings the power of
machine learning to any organization. Over 1,700 independent software
vendors, 100,000 enterprise customers, and 2 million developers rely on
Progress to power their applications. Learn about Progress at www.progress.com or
+1-800-477-6473.

Progress and Progress Software are trademarks or registered trademarks
of Progress Software Corporation and/or its subsidiaries or affiliates
in the U.S. and other countries. Any other names contained herein may be
trademarks of their respective owners.

(1) The following expenses are not allocated to our segments as we
manage and report our business in these functional areas on a
consolidated basis only: certain product development and corporate sales
and marketing expenses, customer support, administration, amortization
and impairment of acquired intangibles, impairment of goodwill,
stock-based compensation, fees related to shareholder activist,
restructuring, and acquisition-related expenses.

(1) Acquisition-related revenue constitutes revenue reflected as
pre-acquisition deferred revenue that would otherwise have been
recognized but for the purchase accounting treatment of acquisitions.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities. Note
that acquisition-related revenue adjustments relate to Progress
OpenEdge and Application Development and Deployment business segments
for Kinvey and Telerik, respectively.

(1) Acquisition-related revenue constitutes revenue reflected as
pre-acquisition deferred revenue that would otherwise have been
recognized but for the purchase accounting treatment of acquisitions.
Since GAAP accounting requires the elimination of this revenue, GAAP
results alone do not fully capture all of our economic activities. Note
that acquisition-related revenue adjustments relate to Progress
OpenEdge and Application Development and Deployment business segments
for Kinvey and Telerik, respectively.